Indonesia is finding it difficult to recover its position as the world’s leading nickel ore exporter despite the government ending a five-year ban on mineral ­exports in January.

A combination of a subdued market and changes in the sourcing of nickel ore, as well as mixed signals from the government, is conspiring against the country quickly resuming pre-ban export levels.

The Indonesian ban, announced in 2012, was intended to encourage the development of a domestic processing industry. However, that aim has not been realised, and Indonesia has watched the Philippines take its mantle as the leading nickel ore exporter, shipping 30.6 million tonnes per year to China.

The decision to end the ban had been touted as ­important for the dry bulk market. Nickel ore is the fifth-largest minor bulk trade and one of the largest intra-Asian trades for the handymax and supramax market.

A resumption of exports from Indonesia was expected to add tonne miles to the dominant nickel ore trade from South Asia to the world’s largest buyer, China.

Having seen the Philippines take its market share, Indonesia had been hoping to kick-start exports again by offering licences to trade to some of its mines.

However, so far only a limited number of export ­licences have been granted, amounting to about 0.5 million tonnes per month, according to London ­analyst Maritime Strategies International. The latest ­licence was awarded this month to Ceria Nugraha Indo­tama, which was approved to export 2.3 million tonnes of low-grade nickel ore for one year.

It is reported that export permits for about six million tonnes have now been granted, compared with a total seaborne trade volume of 42.1 million tonnes predicted for 2017, according to shipbroker Clarksons.

There is no clear indication from the Jakarta government on what level of exports it expects to achieve. Statements from officials have varied from talk of a five-million-tonne annual cap to setting a level of about 15 million tonnes in the first year of the ban ­being lifted.

There are a number of reasons for the resumption of ­Indonesian exports failing to meet expectations.

First, prices have fallen as demand from China failed to reach previous levels. Nickel ore prices for 1.8% concentrate, quoted at about $65 per tonne at the start of the year, are now being quoted at about $50 per tonne.

The depressed Chinese ­demand is reflected in ­limited growth in seaborne trade. The world nickel ore seaborne trade is growing at a modest 4% this year but that represents a market struggling to recover ­after slumping to a five-year low of 40.5 million tonnes last year. The current seaborne nickel ore trade is only half of its 2013 peak of 80 million tonnes.

The withdrawal of Indonesia from the trade prompted China to seek alternative sources. Although it has taken most of its imports from the Philippines, it also began to source more nickel ore from intermediate products such as nickel pig iron. The result is that the nature of the nickel ore shipping trade has changed, with lower volumes.

But, many observers argue it is high time the trade was reformed and more emphasis placed on shipping nickel as a refined product.

The traditional trade from Indonesia has always been highly inefficient, with shipments made up predominantly of waste material — which is refined out at the destination — and typically holding less than 2% nickel ore. The rest comprises mud and, in some cases, moisture that has led to liquefaction and the loss of several vessels and dozens of seafarers’ lives.